The dark web has gained significant attention in recent years, and one of the most talked-about aspects of this secretive realm is the use of cryptocurrencies, particularly Bitcoin. With its pseudonymous nature and decentralized structure, Bitcoin has become the preferred digital currency for transactions on the dark web.
Darkweb research: Past, present, and future trends and mapping to sustainable development goals
What is the Dark Web?
The dark web refers to the collection of websites that are not indexed by traditional search engines and require special software, such as Tor, to access. It operates on a hidden network where users can remain anonymous, making it an attractive platform for illegal activities.
Bitcoin’s Role on the Dark Web
Quantifying Dark Web Shops’ Illicit Revenue
Another great privacy-focused wallet you can use is Incognito Wallet, an open-source wallet which enables privacy on any asset it holds. The wallet applies anonymity techniques like RingCT and StealthAddress (similar to Monero) – to all assets it supports. Some SPV wallets have the capability of using bloom filters to help conceal which addresses you own by requesting extra transactions that don’t involve your wallet. Once the association has been made, someone with enough determination, time, and resources could analyze the blockchain and determine how many bitcoins an individual has, how they receive them, and how they spend them. Despite its reputation, Bitcoin is not completely anonymous; With every transaction publicly disclosed on the Blockchain and identity verifications required by exchanges, it’s easy to see how your Bitcoins can be traced back to you.
Bitcoin has become the de facto currency for transactions on the dark web due to its unique properties:
- Pseudonymity: While Bitcoin transactions are recorded on a public ledger called the blockchain, users can create multiple wallets and addresses, making it difficult to trace their real-world identities.
- Decentralization: Bitcoin operates without a central authority, such as a government or financial institution, which makes it resistant to censorship and control.
- Security: Transactions made with Bitcoin are secured through cryptography, ensuring the integrity and privacy of the transactions.
In this study, author and index keywords were retrieved and thematically grouped into groups [43] to investigate the evolution of topics published about Darkweb. A quadrant chart has been used to understand the research productivity and Influence [44]. SciVal was used to understand collaborative partnerships and analyze research trends [45].
The Dark Side of Bitcoin
Zhong’s Scheme to Defraud
Users of dark markets easily spend a lot of time on them, but they are still on one site. Seekers of child abuse are likely to jump from one site to another before finding what they are looking for. The FBI shut down the site and eventually caught and convicted the operator, but the high-profile case cast a shadow over bitcoin as a currency for outlaws. Since then, federal regulations have required legitimate exchanges to verify the identity of traders with driver’s licenses and other personal information, though some overseas operations allow anonymity. Commodity Futures and Trading Commission is allowing bitcoin options to begin trading.
While Bitcoin may have legitimate uses and benefits, its association with the dark web has raised concerns about its role in facilitating illicit activities:
- Drug Trade: The dark web is notorious for serving as a marketplace for illegal drugs, and Bitcoin is often the preferred payment method due to its pseudonymity.
- Hackers and Ransomware: Cybercriminals often demand ransom payments in Bitcoin to maintain their anonymity and avoid detection by law enforcement.
- Money Laundering: Bitcoin’s decentralized nature makes it an attractive tool for money laundering, as funds can be easily transferred across borders without the need for traditional banking systems.
Regulatory Efforts
Trading volume share for a given market is the trading volume of a market normalised by the total trading volume of all dark marketplaces. We find that the top two destination marketplaces experience an increase in the trading volume share starting 2 days after the closure, and saturating about 6 days after with a share of \(27\%\), more than double the share at the time of closure. The second top destination, on the other hand, increases its share from 5 to 8.7%. Justice Department and Europol announced the closure of two of the largest dark web marketplaces, AlphaBay and Hansa, which listed tens of thousands of vendors selling illegal drugs, counterfeit identification documents and other illicit products. The assessment also says Helix interacted with BTC-e, the cryptocurrency exchange allegedly run by Alexander Vinnik, a Russian man who is currently on trial in France for charges that include money laundering and involvement in organized crime. “FinCEN observed Helix conducting 1,723 direct bitcoin transactions worth over $904,637 with BTC-e,” the agency said, and Harmon did not file a suspicious activity report on those.
Law enforcement agencies and governments worldwide have been stepping up their efforts to combat the use of Bitcoin on the dark web:
- In our study, we created a co-citation map to uncover the linkages between SDG as measured through citations.
- On May 10, 2022, amid a drop in Bitcoin’s value, Dr. Wan sent an additional payment of approximately $1,200 in Bitcoin to ensure the escrow account contained the full required amount for the murder.
- The paper is a systematic guide for addiction professionals on the deep web and online drug marketplaces.
- First, addresses were grouped based on a set of conditions, following some of the heuristics mentioned above and discussed in Supplementary Information Section S1.
- Dark Web Shutdowns: Several major dark web marketplaces have been shut down by law enforcement agencies, leading to the arrests and prosecutions of individuals involved in illegal activities.
- Blockchain Analysis: Companies specializing in blockchain analysis are working with law enforcement agencies to track and trace illicit transactions on the Bitcoin network.
- Regulation and Compliance: Governments are implementing stricter regulations to ensure that cryptocurrency exchanges and businesses comply with anti-money laundering (AML) and know-your-customer (KYC) requirements.
The Future of Bitcoin’s Dark Web
As law enforcement agencies improve their techniques for tracking illicit transactions and governments tighten regulations, the future of Bitcoin’s role on the dark web remains uncertain. While cryptocurrencies offer advantages like privacy and security, they also present challenges in combating illegal activities.
Frequently Asked Questions (FAQs)
- Is Bitcoin completely anonymous?
- Can I buy legal products on the dark web with Bitcoin?
- Are all cryptocurrencies associated with the dark web?
No, Bitcoin is not completely anonymous. While it offers pseudonymity, transactions can be traced on the public blockchain. However, users can take precautions to enhance their privacy.
Yes, there are legal products and services available on the dark web. However, caution is advised as illegal activities dominate this hidden space.
No, while Bitcoin is the most commonly used cryptocurrency on the dark web, other cryptocurrencies like Monero and Zcash offer enhanced privacy features that make them attractive for illicit transactions.
